It’s good to own small and middle markets was how you could summarize Lamar CEO Sean Reilly on yesterday’s second quarter earnings call.  Here are some other Reilly comments.

Improving sales

At present our pacings are showing sequential improvement every month…that implies full year revenue decline for 2020 of approximately 13-14%.  June was a very good month for us in terms of total contract value written for the rest of the year…That said, the second surge of covid cases in July has resulted in a slight softening, particularly around amusement events, sports entertainment and the like and particularly in the West…

What’s up and what’s down

Across the country small and middle markets continue to perform better than larger markets, local sales continue to perform better than national sales.  Customer categories that are showing relative strength include healthcare, education, insurance, real estate and anything related to home improvement.  Categories showing relative weakness include…amusements, entertainment and sports and retail and fine dining.

Pricing

We believe we will be able to hold onto pricing better than we did in the Great Recession…There is divergence in pricing in our largest DMA’s versus what’s going on in our small and middle markets.  We’re probably having a little bit more difficulty holding on to pricing in places like New York, Chicago, Atlanta, Dallas, etc…Fortunately 80% of our business looks like Tallahassee, Little Rock and Baton Rouge, smaller and middle markets where pricing is holding up much better.

300 digital billboards coming in 2021

We are beginning to lay in our plan for 2021 and our initial planning is to take care of the…backlog of digitals that didn’t get build this year…so I’m hopeful that in our November call we’ll be able to report that we’re planning to put up 300 or so in 2021…

Not much M&A Activity

The M&A pipeline is really thin right now.  Billboard assets are durable.  They’re valuable.  Most sellers don’t want to have to sell in a distressed environment…We’re seeing a little bit of activity but nothing even close to what a normal year would be.

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